A blast ripped through a serene Bangalore neighborhood called Malleshwaram on Wednesday morning, just meters away from the local offices of the Bharatiya Janata Party (BJP), injuring 16 people including 8 policemen. The incident came amidst local elections to choose a new government in the state of Karnataka, of which Bangalore is the capital.

Karnataka’s police chief Lalrokhuma Pachau said the blast originated from a motorcycle standing next to three parked cars and close to a vehicle full of policemen on election duty. Pachau confirmed that the blast was caused by an improvised explosive device. The state’s home minister R.Ashoka said the incident amounted to a terror attack.

Bangalore, India’s start-up hub and its technology capital, is home to the Indian operations of many global corporations. That makes the city a vulnerable target for economic terrorism. A big terror attack on the city could reverberate globewide as many Bangalore-based companies carry out tasks for multinational corporations around the world. In the past, bomb blasts in the city have sent the stock market plunging and made multinational companies and foreign investors edgy.

Terrorism, once confined to cities like Mumbai and New Delhi, invaded the tranquil Bangalore less than a decade ago. In 2005, in the first recorded terrorist act, a distinguished scientist was killed and several others injured in a machine gun attack on an international conference. Three years later, a series of nine low-intensity bombs set off by timer devices erupted in central neighborhoods, killing one person and injuring several. In 2010, two bombs exploded in a packed cricket stadium just before a match, injuring many.

Since the serial blasts, large companies such as outsourcers Infosys and Wipro, both headquartered here, have several layers of their own security. They are further ringed by trained commandos of the government’s industrial task force, a service that they pay for. At Infosys and Wipro as also in the offices of General Electric, Microsoft, Yahoo and Google in Bangalore, visitors are routinely frisked, photographed and sent multiple layers of checks including metal detectors.

The quandary for many companies has been in tightening security without alarming workers and visiting clients. That could turn out to be counter-productive for the outsourcing business and the image of Bangalore as a secure business destination. Bangalore accounts for 40 percent of India’s $75 billion software export industry, a big chunk of it to the United States.

Indian cities are generally considered soft targets as they are ill-equipped to deal with large-scale terror attacks. Bangalore, for instance, has a limited police force with poor intelligence-gathering capabilities and inadequate weaponry. Following Wednesday morning’s blast, forensic experts and commando forces were flown in from New Delhi and Hyderabad. Bangalore has a limited anti-terrorism force. The state’s police chief Pachau conceded in a phone conversation a few hours after the blast, “It is a big city with a huge population. Our anti-terrorism capabilities are limited.”